THQ is in a financial downward spiral and things only seem to be getting worse for the publisher as it has now defaulted on one of its lenders.

The company currently has a $50 million credit facility with lender Wells Fargo, but it has been forced to default on part of loan after failing to meet certain obligations set in the agreement. Despite the default Wells Fargo has agreed to continue accepting funding requests from the company while it tries to reach an agreement over the defaulted debts, however the lender noted that an agreement may not be possible.

THQ took the credit facility out in September last year over a four year term, meaning that the publisher must pay back any outstanding debts by that time, and based on a default this early it’s not looking good. THQ’s stock also dropped 55 percent last week following underwhelming financial results.

To further add to the worries, THQ also admitted that it is unable to file its quarterly 10-Q report–a U.S. Securities and Exchange Commission report that is compulsory for all publicly traded corporations. The reason given was that it was unable to file in time “without unreasonable effort or expense,” but expects to have it done within the five-day extension period.

All of these issues spell doom for the floundering publisher unless it can turn its fortunes around quickly. Sadly, I don’t see a way they can do that, especially having just announced that three of its biggest releases have all been delayed, South Park, Metro: Last Light, and Company of Heroes 2.

Is THQ on the way out? Share your thoughts below.